National Legal Network of Lawyers

Deciphering Corporate Law

Deciphering Corporate Law

Deciphering Corporate Law

What is Corporate Law?

Each state has its own laws on how corporations can be formed. Individual states have the power to define laws relating to the creation, organization and dissolution of corporations. It can be exhausting to keep up with all of the different terms, laws and specifications surrounding corporate law.

One of the best things you can do is contact an attorney. Even aspects that may seem deceptively simple on the surface can prove to be complex as your corporation grows and encounters new obstacles. The definitions below provide an overview of Corporate Law and a few details into some of its more general aspects.

Corporate Law Attorneys

Corporate Law

  • Corporate personality: Once a company is formed it earns the right to sue and be sued.
  • Capacity and powers: A company is a business, and that limits their powers.
  • Corporate governance: Guidance on how a company can be directed or controlled so it can fulfill goals and objectives adding to the value the company and stakeholders.
  • Corporate constitution: Corporate constitutions set what we expected of everyone in the company. Like any other constitution it is designed to inspire, empower and make each person accountable.
  • Balance of power: Division of authority and power for legal and internal controls.
  • Director’s duties: They have fiduciary duties of loyalty to stockholders or the corporation. Their conduct must not be involving unlawful dividend or stock purchases, redemptions by the corporation or derive any improper personal benefit from a transaction.
  • Corporate litigation: Lawsuits against a corporation, shareholder, members, and directors. Matters associated are breaches of contract, employment relations, and regulatory compliance. Mediation can be an alternate to litigation. There can also be litigation from one business partner for breach of a partnership agreement, or a corporation can sue a business partnership for fraud or breach of contract claims.
  • Corporate finance: Corporate finance to maximize shareholder value through appropriate long and short term money management of cash, inventories, borrowing, lending, credit terms, shareholder dividends, investments, financial needs, assets and liabilities.
  • Shares and share capital:  An individual member’s interest in a company. Total value of a company’s shares is its share capital.
  • Liquidations: Sale of assets to pay creditors.
  • Insider dealing: Illegal stock trading by employees, stockbroker or merchant banker who uses confidential price-sensitive information or buys stock shares for personal gain or for associates. You may be familiar with public cases featuring celebrities like Martha Stewart.
  • Corporate life and death: The legal “person” status of corporations gives the business perpetual life even if stockholders or officials die it does not alter the corporation’s structure.
  • Corporate crime: Corporate crime is referred to as white collar crime. It is a category of criminal offenses that typically occur in businesses or corporations, such as insider trading, antitrust violations, computer fraud, securities fraud, and money laundering.
  • Mergers and acquisitions: A corporate strategy or finance and management involving buying, selling, dividing and combining of different companies and similar entities without creating a subsidiary or joint venture. Mergers and acquisition have become similar.
  • Corporate insolvency: Situation when a company is unable to pay its debts due to lack of cash or because assets are less than total debts owed.

There are real risks to forming corporations both financially and even criminally when it comes to white collar crime. It is essential for your future and the future of your business to listen to the best legal advice before making major company-wide decisions.

If you are planning to create a brand new corporation, you should still seek out a business law attorney with experience in corporate law as they can advise you on all areas mentioned above according to your state law.

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